The Reserve Bank of India (RBI) may cut the major interest rates by 0.25 per cent this week. If this happens, it will strengthen the steps taken to promote consumption in the budget. However, the fall in the rupee still remains a matter of concern. Experts believe that since the retail inflation has been within most of the year of the year within the scope (two to six per cent) set by the Reserve Bank, the central bank has been in interest rate cuts to promote the growth affected by sluggish consumption. Can take steps.
Repo rate remains at 6.5 percent from February 2023
The Reserve Bank of India (RBI) has retained the repo rate at 6.5 per cent since February 2023. Earlier, the last time the interest rate was cut at the time of Kovid (May 2020) and after that it was gradually increased to 6.5 per cent. The new Governor of the Reserve Bank Sanjay Malhotra will preside over the Monetary Policy Committee (MPC) meeting starting on Wednesday. The decision of the six -member committee will be announced on Friday 7 February.
What is the opinion of experts
Madan Sabnavis, the chief economist of Bank of Baroda, said, “This time there is a possibility of cutting policy rate. There are two reasons for this. First, RBI has already announced measures to increase cash. This has improved the market situation. It clears the way forward to cut policy rates. ”
Sabanavis said that boost has been given through the Union Budget and it seems appropriate to reduce the repo rate to support it. The Reserve Bank has announced measures to pour cash worth Rs 1.5 lakh crore to banks on 27 January.
He said, “We can expect some changes especially in the forecast of economic growth. The reason for this was estimated by the National Statistics Office (NSO) 6.4 percent for the current year. It will be interesting to see if the RBI will estimate the growth rate for FY 2025-26. However, it is usually announced in the April Monetary Policy Review.
ICRA chief economist Aditi Nair said, “We don’t think the fiscal incentives made in the Union Budget will have a significant impact on inflation.” So we feel that the balance is in favor of rate cuts in the monetary policy review of February 2025. ”Nair said, however, if the global factors cause more weakness in the cross rate of the rupee against the dollar during this week during this week. If, the policy rate cut can be postponed by April 2025. The rupee fell 55 paise to 87.17 (provisional) per dollar on Monday against the US currency.
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